Government report recommends national retirement dashboard
reasonably achieve?
“We’re bringing a new technology that makes it easy to evaluate your comparative performance,” Mr. Valdes-Perez said of the Squirrel Hill-based company.
Employer-sponsored 401(k) plans have become the most common way for American workers to save for retirement. But each time a worker switches jobs, they could end up with a new account if they don’t combine them along the way.
According to the GAO’s survey, released in February, two-thirds of 401(k) participants would find a comprehensive pension dashboard — where they can see all their current and former plan savings in one place — a useful resource.
More than 92 million Americans participate in, and have saved, more than $7 trillion in 401(k) plans, according to the GAO.
Employees and former employees usually don’t have much say in how companies operate the 401(k) plans they sponsor when it comes to fees, expenses and choosing vendors to provide services. But many plans do allow employees to pick the investments in their 401(k) from a basket of investment options, if participant-directed brokerage accounts are an investment option.
According to Benchmine, 405 out of 828 401(k) plans with $1 billion or more in assets provide the option of participant-directed brokerage accounts, according to federal data for 2022.
Transferring retirement funds from one plan to another causes stress and anxiety for some participants, the GAO said.
“401(k) participants who recently completed a planto-plan rollover faced challenges understanding and complying with their plan’s requirements,” the GAO said. The report didn’t specify which parts of the rollover process was most problematic for plan participants, but a high percentage of people had complaints.
For example, 25% of participants indicated that there were too many steps to follow in the process; and 22% said they were unclear about questions or information in the rollover form.
“Allowing plans to automatically rollover after they change jobs can be beneficial for participants — particularly those unengaged with their plan because they can benefit from account consolidation without navigating a challenging manual process,” said the GAO.
The idea stems from a study of six countries the GAO examined that have adopted pension dashboards — Australia, Belgium, Denmark, the Netherlands, Norway and Sweden. All six countries established a centralized pension dashboard that allows participants to view their retirement savings securely online and at no charge.
Although Benchmine provides more insights on 401(k) plans, it requires more steps to access information than a simple dashboard would.
The Benchmine search engine is a free online tool with public access to data that all companies offering 401(k)s to their employees are required to report annually to the U.S. Department of Labor. Users can see how their own 401(k) balances and annual contributions compare with the average balances of workers in their particular company; or make comparisons with workers’ average balances at any other company nationwide.
The Benchmine search engine also pinpoints where a company’s 401(k) stands when stacked up against other companies in various ways, and offers advice on how to improve.
Mr. Valdes-Perez said the search engine can be useful to job seekers, too, because a poorly performing 401(k) plan could be a warning sign.
“A 401(k) plan is just another operating aspect of the company,” Mr. ValdesPerez said. “Just like a high employee turnover, a 401(k) plan that’s not performing well, raises a red flag.”